The Reserve Bank of India may raise its policy repo rate by 50-75 basis points in the current cycle, Bandhan Life said on October 1, 2026. Avinash Agarwal said, "Any RBI rate action would be guided primarily by local macroeconomic factors." Global risks and oil prices continue to pressure the rupee.
On equities, Bandhan Life flagged that elevated global uncertainty and firm valuations would make the Indian market increasingly stock-specific, with earnings visibility becoming a key differentiator for investors.
The Reserve Bank of India may raise its policy repo rate by 50-75 basis points in the current cycle, driven by domestic inflation, liquidity conditions and financial stability concerns rather than the US Federal Reserve's rate trajectory, Bandhan Life Insurance said on Thursday.
Avinash Agarwal, Senior Vice President and Head of Equity at Bandhan Life, said any RBI rate action would be guided primarily by local macroeconomic factors. The Fed, meanwhile, could deliver one to two additional hikes if inflation reaccelerates or labour markets remain tight.
Global uncertainty
On equities, Bandhan Life flagged that elevated global uncertainty and firm valuations would make the Indian market increasingly stock-specific, with earnings visibility becoming a key differentiator for investors.
The IT sector faces a difficult near-term earnings outlook as rising AI spending diverts corporate budgets from traditional technology services. Meaningful upgrades to IT earnings estimates are unlikely before the second half of FY27, the insurer said.
Healthcare, by contrast, retains structural appeal. India's significant shortage of hospital beds, ongoing capacity expansion by organised players and sustained private equity interest continue to support the sector.
The rupee is expected to face sustained pressure from a higher oil import bill, current account dynamics and dollar strength globally, with capital inflows providing a buffer rather than a structural remedy. The medium-term currency outlook points to gradual, managed depreciation.
Strong Q1FY27 earnings could offer some near-term support to equities, though macroeconomic risks from crude prices, US bond yields and geopolitical tensions remain key variables to watch.